In accordance with the Electricity Act 2003, State Electricity Regulatory Commissions (SERCs) have notified the Renewable Portfolio Obligation (RPO) by which obligated entities, namely distribution companies, captive generators, and open access consumers, are required to purchase a certain quantity of electricity for consumption through renewable energy sources.
Electricity is procured through such sources at regulated feed-in-tariffs specified by the SERCs. Apart from this, there are favourable conditions for off-take of power, transmission losses, as well as transmission charges. The fiscal incentives available to investors include tax benefits as well as concessions for import of equipment. While there is impressive growth in generation capacity at the national level, the outcome differs from state to state. In spite of favourable conditions the obligated entities in most states have not been able to meet their respective RPO targets (see Annexure 1). This paper briefly evaluates the existing regulatory framework for renewable energy in India and discusses the development of a market for Renewable Energy Certificates (RECs).
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